Insurer under fire for axing hospital cover

Watchdogs to investigate Quinn Healthcare after it withdrew cover for psychiatric hospital

Quinn Healthcare, the heath insurance company owned by the entrepreneur Sean Quinn, faces a probe by consumer and health watchdogs after it dropped cover for St Patrick's hospital, Ireland's largest psychiatric institution, with almost 300 beds.

Regulators fear the move, in effect since March 16, could be an attempt to walk away from the high costs of paying for psychiatric care. The average stay in St Patrick's is more than 30 days, with claims averaging 15,000-20,000, according to VHI, Quinn's state-owned competitor.

Quinn Healthcare said the decision followed its failure to reach new pricing terms with the hospital. "We have been in negotiations with St Patrick's since June 2008 and ideally we would not be in this position," it said. "However, we have been unable to resolve contractual issues and agree reasonable reimbursement rates. Quinn Healthcare covers a range of alternative facilities which have similar programmes of similar length."